The Energy Regulation and Markets Review - Stikeman Elliott

iii
Rates and tariffs
Germany
While the basic legal framework concerning network access tariff regulation is set out
in the EnWG, the procedure and the standards of review are substantiated within the
ARegV, StromNEV and GasNEV. Following a period of individual approvals of costoriented
network tariffs, since the beginning of 2009 the tariffs for the network access
have been determined by way of incentive regulation.
Under the regime of incentive regulation, the competent authorities determine
revenue caps for approximately 1,600 German energy supply network operators
(both on the distribution and transmission level). Deviating from the previous static
approval of cost-oriented tariffs, incentive regulation adds dynamic efficiencies by
setting incentives for efficient operation of the network. For each network operator, the
competent authorities define ex ante annual revenue caps, which include a general as
well as an individual efficiency target. Such efficiency targets will be formulated and
distributed across the regulatory period in a way that enables the network operator to
achieve and exceed these targets by employing realistic and reasonable measures. Within
the regulatory period of five years, network operators are allowed to collect the economic
benefits resulting from efficiency gains, effectively decoupling actual costs of the network
operation from admissible network tariffs. However, during the next regulatory period,
the benefit resulting from the improvement in efficiency must be passed on to the
customers through a decrease in network tariffs.
In order to determine the revenue cap for a network operator, the first step is
to calculate the relevant cost base level on the basis of the principles of a cost category
accounting scheme set out by the provisions of GasNEV and StromNEV. In principle,
the relevant cost base level is determined according to a cost analysis two years prior to
the beginning of the regulatory period on the basis of the prior closed business year.
Accordingly, for the second regulatory period (gas sector: 2013–2017, electricity sector:
2014–2018), the cost base level has been calculated in 2011 for gas network operators
and 2012 for electricity network operators based on the network-related cost data of the
financial year 2010 (gas) and 2011 (electricity), respectively.
In principle, the revenue caps will not be adjusted during a regulatory period;
however, the law provides for an adjustment of the revenue caps in limited circumstances
in order to reflect, inter alia, the annual inflation rate, a change of significant structural
parameters or cost factors, or unpredictable events causing undue hardship for the
network operator.
iv Security and technology restrictions
In Germany, there is no legislation that requires general safety measures comprehensively
applying to all critical energy infrastructure. However, sector-specific safety obligations
apply in particular to the operation of nuclear power generation based on the Nuclear
Power Energy Act and its respective ordinances.
In respect of network infrastructure, the EnWG provides for the rather general
obligation to ensure safe operation of any energy network that corresponds particularly
to the technical regulations of the German Gas and Water Association. In this respect,
the BNetzA is entitled to monitor compliance and, moreover, to implement further
safeguard measures if necessary.
102